Hotels giant Interstate has issued a massive vote of confidence in Birmingham – with a landmark deal to take over three key venues in the city centre.

The US company has announced its debut in the UK market with an agreement to take over the running of Hotel Indigo, Marco Pierre White and The Club and Spa at The Cube, the Hampton by Hilton, in Broad Street and the Holiday Inn Express, under construction in Snow Hill.

Interstate, which has 344 hotels with more than 65,000 rooms globally, plumped for Birmingham at the expense of London and other major cities, with company executives citing the attractions of the Midlands capital as a key factor.

Bosses say it is business as normal for all employees at the Birmingham hotels following the sale affecting a total of 14 UK venues under a deal which sees the management arm of UK-based Sanguine Hospitality sold to the American giants.

And Interstate plans to run the hotels from Birmingham, with new flagship premises in Commercial Street as the US group’s British nerve centre.

Sanguine Hospitality managing director Nick Taplin, now with Interstate Europe, said: “Interstate is the largest third party hotel management company in the world and they chose this fantastic city.

"For a national business, being in the centre of the UK makes sense. We chose Birmingham as the city for expansion and Birmingham is the biggest winner out of all of this. By the middle of this year, we will have three hotels operating in Birmingham under three different brands.

“Transport was a key factor in this decision. That is so important in our business. Within two hours (of Birmingham) we have hotels in Sheffield, Bristol, Manchester, Liverpool, etc. You can end up spending your whole life on trains.”

Interstate Hotels and Resorts president Ted Knighton said: “This is my first visit to Birmingham and we have high expectations for growth. As a company, we had to have an operating platform here in the UK. We have over 26,000 employees, over 350 hotels worldwide, we have offices in the US, Shanghai, Delhi, Moscow but our operating platform for the UK will be right here in Birmingham.

"I am very impressed by the people joining us – they are a very capable team. This property here is second to none. It compares very well with the States.”

He said plans were in the pipeline to expand operations at Hotel Indigo.

He added: “We are in talks with the landlord about the potential of taking more space. We would like to put more bedrooms here, that is no secret, we are looking to how we can utilise bedrooms better.”

The hotel group’s executive vice-president Ken McLaren said: “Companies are very aware of costs because the factor of basing yourself in London is very, very significant.”

Mr Taplin said it was business as usual for around 900 UK staff, including employees at the Birmingham hotels.

He said the firm would continue investing in and developing hotels and high-profile restaurants.

He added: “All personnel working for Sanguine move across by TUPE to Interstate. From a staff point of view, nothing has changed.

“Sanguine is still running and Interstate bought the management contract. We are partners going forward.”

The sale of the management arm of Sanguine ushers in a new era for the Hotel Indigo after the UK firm paid out a multi-million pound sum for a long lease to develop the Marco Pierre White rooftop restaurant, the Hotel Indigo and The Club and Spa on the ground floor.

Mr Taplin said Birmingham would be the new operation’s ‘centre of excellence.’

“This is our flagship,” he added.

“We were looking a site in Cardiff three years ago and we heard about this fantastic venue in Birmingham. We came and looked at the Cube on a bright sunny day.

“The building had a chequered history but we could see that there was massive potential. We bought for £4 million and then we spent £10 million on it. It was a fantastic opportunity.

“We fully agree that Birmingham is going to be the centre of the company going forward.”